The Canadian housing market in 2007 set a number of MLS® sales records, and the re-sale housing market is expected to remain at near record sales levels in 2008, according to a The Canadian Real
Annual residential MLS® sales activity, according to an article on the CREA’s website, totaled 520747 units in 2007, up 7,6 percent from 2006 levels. This was the largest annual sales growth since 2002, and the first time transactions via the MLS® systems of real estate boards in Canada have surpassed 500 000 units sold in one year.
“The results in 2007 show the strength and the affordability of the Canadian residential market,” says CREA President Ann Bosley. “The statistics again show just how different the housing markets are in Canada and the United States. Canadian REALTORS® know that Canadian mortgage lenders correctly see that home prices will continue rising. We know there is still strong competition for mortgage business in Canada.”
Three key economic ingredients, according to the CREA article, will keep Canada’s housing market on a different track from the United States. One is consumer confidence, the second is employment, and third is affordable interest rates. The Bank of Canada cut interest rates on January 22 because of weaker prospects for Canadian economic growth in 2008. “Those lower interest rates will also help temper the erosion in housing affordability due to additional home price increases,” Bosley added. The Bank of Canada is expected to cut its trend-setting rate again in March.
CREA’s Chief Economist Gregory Klump says that the Canadian housing market in 2008 will pull back from the breakneck pace set in 2007, but this is still forecast to be the second-busiest year on record in almost all provinces, with residential unit sales reaching an estimated 512 705 units.
Average prices for MLS® home sales are expected to keep setting records in 2008, although prices will increase more slowly as the market becomes more balanced.